On Jul 15, we issued an updated research report on Packaging Corporation of America (PKG - Free Report) . The company is poised to gain from solid demand for both of its segments and the e-commerce boom which will spur demand for boxes. However, the company’s results will be affected by annual maintenance outages.
Higher Maintenance Outage & Lower Prices to Impact Q2 Earnings
The company expects second-quarter 2019 earnings of around $2.05 per share, reflecting year-over-year decline of 1%. While seasonally higher containerboard and corrugated products shipments, reduced energy costs, recycled fiber prices and lower effective tax rate will bolster earnings, softer prices will affect results. Further, in the Paper segment, scheduled outage costs will be higher due to annual shutdown at the International Falls mill. Nonetheless, the company anticipates higher freight, repairs, and certain fixed costs as well as higher share-based compensation costs across its segments owing to the accounting treatment of restricted stock.
The Zacks Consensus Estimate for current-year earnings is pinned at $8.10, reflecting 0.87% year-over-year growth. The Zacks Consensus Estimate for revenues is currently pegged at $1.80 billion, calling for 1.56% year-over-year growth.
E-commerce Boom to Aid Performance
Packaging Corporation is projected to benefit from the e-commerce boom, which will spur demand in boxes. These days, customers find a lot of different channels to sell through, including e-commerce. The company has a wide base of consumers and anticipates its business to grow in the near term.
Investment for Future Growth
The company maintains a balanced approach toward capital allocation to profitably grow the company, as well as maximize returns for its shareholders. It ended first-quarter 2019 with $442 million of cash. Packaging Corporation anticipates capital spending for the ongoing year to be $390-$410 million, with roughly 35-40% earmarked for strategic capital projects, including organic growth, cost reduction, and efficiency projects. Further, share repurchases will bolster earnings.
Packaging Corporation of America Price and Consensus
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
On Jul 15, we issued an updated research report on Packaging Corporation of America (PKG - Free Report) . The company is poised to gain from solid demand for both of its segments and the e-commerce boom which will spur demand for boxes. However, the company’s results will be affected by annual maintenance outages.
Higher Maintenance Outage & Lower Prices to Impact Q2 Earnings
The company expects second-quarter 2019 earnings of around $2.05 per share, reflecting year-over-year decline of 1%. While seasonally higher containerboard and corrugated products shipments, reduced energy costs, recycled fiber prices and lower effective tax rate will bolster earnings, softer prices will affect results. Further, in the Paper segment, scheduled outage costs will be higher due to annual shutdown at the International Falls mill. Nonetheless, the company anticipates higher freight, repairs, and certain fixed costs as well as higher share-based compensation costs across its segments owing to the accounting treatment of restricted stock.
The Zacks Consensus Estimate for current-year earnings is pinned at $8.10, reflecting 0.87% year-over-year growth. The Zacks Consensus Estimate for revenues is currently pegged at $1.80 billion, calling for 1.56% year-over-year growth.
E-commerce Boom to Aid Performance
Packaging Corporation is projected to benefit from the e-commerce boom, which will spur demand in boxes. These days, customers find a lot of different channels to sell through, including e-commerce. The company has a wide base of consumers and anticipates its business to grow in the near term.
Investment for Future Growth
The company maintains a balanced approach toward capital allocation to profitably grow the company, as well as maximize returns for its shareholders. It ended first-quarter 2019 with $442 million of cash. Packaging Corporation anticipates capital spending for the ongoing year to be $390-$410 million, with roughly 35-40% earmarked for strategic capital projects, including organic growth, cost reduction, and efficiency projects. Further, share repurchases will bolster earnings.
Packaging Corporation of America Price and Consensus
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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